Govt plans to free up gasoline, diesel prices: minister

KARACHI: The government plans to let domestic fuel prices move more freely by deregulating them to increase a competitive environment for the downstream energy sector, petroleum minister said on Wednesday.

 “Petroleum prices are not regulated in most of the countries, even India last year de-regulated the sector,” said Shahid Khaqan Abbasi, Federal Minister for Petroleum and Natural Resources. “This is the right to time do so when the global oil prices are low.”

Addressing the ceremony marking Bakri Pakistan’s 10 years of direct operation in the country, the minister said they intended to de-regularise the petroleum sector as this would benefit the consumers as well as open opportunities for the investors.

He, however, did not mention any time frame in this regard. The global price of Brent oil is currently around $30 per barrel, not far from 13-year lows.

Most of the countries, including neighbouring India have deregulated gasoline and diesel prices and linked domestic pricing to global levels.

Abbasi said Pakistan’s energy sector was growing substantially offering players with several opportunities to invest, diversify and develop vertically.

Talking about the country’s energy mix, Abbasi said that imported liquefied natural gas (LNG) was the only solution. “Energy situation in the country is hampering economic growth by at least 2.0 percent and this needs to be fixed,” he added.

Petroleum minister said they were close to finalise a LNG import deal with Qatar Gas and added that the “LNG rates available at the moment were cheaper than the locally produced gas.”

“This year Pakistan imported 1.5 million tons of LNG, while during 2017 around 4.0 million tons of LNG would be imported,” Abbasi said.

Earlier, addressing the ceremony Shakil Baig, managing director of Bakri Pakistan said the Saudi Arabian based group had established two oil marketing companies in the country in 2005, including Bakri Trading Company Pvt Limited and Overseas Oil Trading Company Pvt Limited.

“These companies are in the advance stage of merger, to be followed by an Initial Public Offering in order to be listed on the Pakistan Stock Exchange,” Baig said.

Bakri’s operations in Pakistan date back to 1994, starting with the supply of petroleum products directly to the government. A 100 percent foreign investment of Saudi Arabia's Bakri International Energy Company, Bakri Pakistan's key business activities include procurement of black and white oil products from local and international suppliers, storage and supply of petroleum products to its retail outlets and power generation companies.

Over the years, the company has established storages and terminals at Port Qasim, Machike and Shikarpur and further plans to develop storage points at Daulatpur, Mehmood Kot and Sihala. Its under-construction terminal at Shikarpur is planned to be operational during fiscal 2016.

The company has entered the aviation fuel business and plans to explore the possibility of establishing bunkering services in the country.

Bakri Pakistan has also introduced world renowned lubricant brands Q8 in the local market with variants ranging from automotive to industrial use.

The company has also developed more than 300 retail outlets, while a large number, currently in development stage, will join the network soon.